The cost of small cars is no longer small!

James2k

motorguy wrote: »

Yes, in those circumstances you'd hand it back to the finance company (BMW Finance) with nothing further to pay (subject to fair wear and tear).

If you took the car to Audi they "should" direct you to hand the car back to BMW Finance and then effectively sell you their car from a clean slate.

Often what happens is the dealer you are buying off will try to take your car as a trade in. There are various reasons for this but mainly

• If you leave his showroom you may never come back
• Trade ins usually mean another opportunity for profit

When its that far away as your example is though i'd imagine the Audi dealer "should" advise you correctly (if he has any scruples at all).

I think generally speaking the finance companies have the residual values skewed in their favour so such a scenario would be relatively rare these days

cool, thanks for the explanation :beer:

motorguy

James2k wrote: »

cool, thanks for the explanation :beer:

Yeah no probs.

almillar

How does trading it in at another brand/dealer work with negative equity - genuine question i don't know.

Nothing happens. You've agreed the GFV, Guaranteed Final Value, at the start of the deal. That number IS the amount you pay at the end to keep the car, or you just hand it back.

Negative equity on a PCP car is either a sales tactic to get more money from your for your next car, or the garage has got the value wrong at the start of the agreement, and the car's worth less than they thought it would be. That's THEIR problem, not yours. Hand it back, go to another dealer. Start from £0 again, not from -£1,000 or whatever.

And Equity, as in positive equity, could again be a sales tactic. It might sound good, but it means you've just been overpaying on your car all those years.

motorguy

almillar wrote: »

Nothing happens. You've agreed the GFV, Guaranteed Final Value, at the start of the deal. That number IS the amount you pay at the end to keep the car, or you just hand it back.

Negative equity on a PCP car is either a sales tactic to get more money from your for your next car, or the garage has got the value wrong at the start of the agreement, and the car's worth less than they thought it would be. That's THEIR problem, not yours. Hand it back, go to another dealer. Start from £0 again, not from -£1,000 or whatever.

And Equity, as in positive equity, could again be a sales tactic. It might sound good, but it means you've just been overpaying on your car all those years.

A PCP deal could be in negative equity, if you opt not to hand it back or if you're not yet at the end of the term.

The original selling garage has nothing to do with the setting of the residual value - its set by the finance company.

Also the car is handed back to the Finance Company, not to the garage.

almillar

A PCP deal could be in negative equity, if you opt not to hand it back or if you're not yet at the end of the term.

The original selling garage has nothing to do with the setting of the residual value - its set by the finance company.

Also the car is handed back to the Finance Company, not to the garage.

Yes - the point I was making is that the customer need not worry about negative equity at all - that's the 'seller's problem (garage, finance co, manufacturer).

fred990

Is PCP the next sub-prime crisis?
There's no such thing as a free lunch....or is there?

AndyMc.....

fred990 wrote: »

Is PCP the next sub-prime crisis?
There's no such thing as a free lunch....or is there?

Not really you expect a car to depreciate.

[Deleted User]

If you need pcp you can’t afford the car.
Live within your means.
And yes I think pcp is the next sub prime crisis.

Ganga

This thread has gone off the subject of small cars not being small anymore.

AndyMc.....

Ganga wrote: »

This thread has gone off the subject of small cars not being small anymore.

I think it's way over your head.